It is the responsibility of the government to ensure that all the aspects of economy maintain a stable level so that the country can grow and expand. Government regulates many things in an economy including inflation, exports and imports, prices of many vital commodities, and many important economic aspects.
The government of US has entrusted the job of regulating the monetary policy and interest rates along with the margin requirements. Fed was created by an act of Congress and consists of a seven member Board of Governors who is headquartered in Washington DC with operations spread across the major cities of the US. The primary responsibility of the Fed is to set up monetary policy by setting up a FOMC (Federal Open Market Committee) together with five other members. (The Board of Governors of the Federal Reserve System)
The Fed comes out with the monetary policy in order to ensure a certain key objectives like, delivering price stability with a low inflation level coupled with an objective to support the Government's economic objectives of growth and employment. Price stability is taken care of, by the Government's usual inflation target of around 2 percent. There is a need to contemplate the crucial and critical role played by price stability in achieving the aforesaid economic stability, and in providing just the right conditions for a sustainable and longer living growth in output and employment. The government's intention is definitely not to achieve the lowest possible inflation rate, as a low inflation is supposed to be equally bad as a high one and for that matter inflation below the target of 2% is judged to be as worse as inflation above the predefined target. The inflation target is therefore very symmetrical. (How Monetary Policy Works)
Impact of Inflation on the Economy
The Fed has a monetary policy and it uses the same to regulate mechanism of the economy. Like when it decides to change the interest rate, the government is trying to check the overall expenditure of the economy. A change in interest rates is mostly used to contain inflation, which is the result of lavish expenditure by the country. The Fed sets a fixed interest rate at which it lends money to financial institutions and depending on this interest rate, individual banks and other financial institutions set up their own interest rates, which apply to the whole economy. This step is of indispensable importance to the economy, as this is very widely used to contain inflation. The only purpose behind such a step is just to contain undue inflationary levels prevailing in an economy. The point to be noted here is that, this interest rate set by the Fed is so effective and powerful that it regulates the whole economy. It affects the stock and bond prices and also influences the asset prices through out the country. This interest rate also regulated the savings in an economy, which eventually results in capital formation and reinvestment. It is note that when interest rates are high, people prefer to invest money in government deposits that are less risky in nature than the stock markets and similarly high interest rates boost up the savings. Lower interest rates make asset and real estate prices go up, as people start ignoring conventional saving instruments and make use of the high growth ventures like shares and houses, which pushes up their
The purpose of this study is to come out with the steps the Fed takes to ensure overall growth in the US economy ensuring maximum employment level. Fed has four economic goals of Full Employment, Price Stability, Economic Growth and External Balance as explained earlier…
With the downward turn of the economy in 2008, the number of poor has increased greatly thus putting the problem back onto the table in a way that must be addressed. However, the conservative and liberal points of view are vastly difference, thus creating an almost paralyzing problem when promoting solutions to the problem.
In his book, Understanding Poverty, Alock also discusses poverty and ways in which the British government has made efforts in reducing it by initiating strategies that improve citizen’s lives. Mantle and Blackworth recommend that social workers should be directly involved in reducing and fighting poverty in the society.
Politics of the poor and the rich and the development of the rich has been a debate for a long time between those who believe that poverty can be alleviated by use of poor-people-centered strategies and those who believe that alleviation of poverty can be attained by the rich using their methods on the poor.
What causes poverty in Britain today?
The population at the lower end of the income distribution have low standards of living (Hills, Sefton and Stewart, 2009). It should, however, be noted that most severe difficulties witnessed in the developing countries are much more rare to be witnessed in developed country such as Britain.
The authorof the paper states that to estimate the impact of such programs on poverty and to suggest reforms to them, analysts often either resort to a comparison of some summary poverty measures with and without the programs, or analyze the programs' “targeting errors” and how they vary with program reforms.
Although, poverty is normally measured as to be unwanted due to the pain and misery it might cause. However, charitable poverty, involving the abandonment of material goods, is seen by some as worthy. It may have an effect on individuals or groups and is not restricted to the developing states.
The World Bank (2008) defines extreme poverty as living on less than US$ 1 per day, and moderate poverty as on less than $2 a day.
There has been an on-going debate as to the actual poverty numbers in the past with many experts claiming there as many as one billion people who fall and live below the poverty line.
led persons (Fama 1617-1574).Lack of equal distribution of resources has led to income inequality which has to be dealt with in order to solve the problem of poverty.
In the first section of this paper am going to deal with the policies that have been put across to help in
This paper seeks to discuss the day today life of poor people concerning the difficulties they face in different life situations.
In the world, health is an international agenda of major concern to all. This is particularly so for people living in abject
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